Correlation Between GlaxoSmithKline PLC and Dreyfus Diversified
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Dreyfus Diversified at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GlaxoSmithKline PLC and Dreyfus Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Dreyfus Diversified Emerging, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Dreyfus Diversified and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GlaxoSmithKline PLC with a short position of Dreyfus Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Dreyfus Diversified.
Diversification Opportunities for GlaxoSmithKline PLC and Dreyfus Diversified
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GlaxoSmithKline and Dreyfus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Dreyfus Diversified Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Diversified and GlaxoSmithKline PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GlaxoSmithKline PLC ADR are associated (or correlated) with Dreyfus Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Diversified has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Dreyfus Diversified go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Dreyfus Diversified
If you would invest 2,329 in Dreyfus Diversified Emerging on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Dreyfus Diversified Emerging or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Dreyfus Diversified Emerging
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Dreyfus Diversified |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GlaxoSmithKline PLC and Dreyfus Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Dreyfus Diversified
The main advantage of trading using opposite GlaxoSmithKline PLC and Dreyfus Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Dreyfus Diversified can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dreyfus Diversified will offset losses from the drop in Dreyfus Diversified's long position.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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